The Millennium Development Authority (MiDA) has shortlisted six applicant companies under the concession for the Private Sector Participation (PSP) in the electricity distribution of the Electricity Company of Ghana (ECG).
The companies are to bid for the ECG PSP concession and the preferred selected concessionaire would be tasked to make investment designed to reduce technical, commercial and collection loses while improving service quality.
The six companies are: Tata Power Company Limited from India; Manila Electric Company from the Philippines; Ch Group Ghana with EDF and Veola Sa with Ghanaian address - Engie Services; SA from France, BXC Company Ghana Limited, registered and operating in Ghana; and Enel S. P. A. of Italy.
At the first bidders conference held on Tuesday in Accra where the bidders were announced, Mr Owura Kwaku Sarfo, the Chief Executive Officer of MiDA, said expectation were that bids would be received by October 2017 and a concession agreement signed with the selected concessionaire by March 2018.
“That way the ECG PSP transaction can reach financial close by early September 2018 so the concessionaire can commence in earnest the management of, operation of, and investment in ECG by October 2018. To enable us achieve this timeline we will require the cooperation of all stakeholders” Mr Sarfo said.
The conference, hosted by MiDA, was to facilitate interaction between the shortlisted applicants for the ECG Concession and potential local and international investors. It also provided the bidders the opportunity to tour selected ECG sites.
It also served as a forum to discuss the structure of the ECG Concession and share ideas aimed at improving the process. The conference was attended by more than 100 people comprising local and international investors, local financial institutions, trade associations and government and regulatory institutions.
Mr Sarfo said the ECG PSP was an activity within the ECG Financial and Operational Turnaround Project with the objective of making a sustainable impact on the reliability and adequacy of electricity supply in Ghana.
Government in 2014 signed the Ghana Power Compact with the Millennium Challenge Corporation (MCC), an independent USA Government foreign aid agency which provides the country a grant of US$498.2 million to improve the performance of Ghana’s power sector to unlock her economic potential, create jobs and reduce poverty.
The major project under the Compact is the ECG Financial and Operational Turnaround Project that is designed to transform ECG into an efficient and financially strong institution through private sector participation. About US$351 million of the MCC grant was being invested in ECG.
Mr Boakye Kyermanteng Agyarko, the Minister of Energy, reminded Ghanaians that the goal of the ECG PSP transaction was to transform Ghana’s main power distribution utility into a more efficient and financially strong institution to positively contribute to the nation’s economy.
“Years of inadequate investment, inefficiencies within the utility, and a large stock of outstanding receivables, particularly in the distribution sector, have all conspired to make the organisations in the sector what they are today.
“As a nation, we should set our sights firmly on turning around the fortunes of the strategic asset which so many have poured their sweat into,” Mr Agyarko said.
He reiterated government’s stance of not privatizing ECG under the Compact and but that the company’s asset would still be owned by the Government through ECG while they were managed and operated by the Concessionaire.
Mr Agyarko said the structure of the ECG PSP transactions included a 51 per cent Ghanaian ownership of the concession vehicle, a 20-year concession term instead of the 25 years published earlier and a no involuntary layoffs of ECG staff as a result of the concession.
The Minister further assured that the Government was committed to bringing about real change in the power sector for the benefit of the present and future generations.
Professor Yaa Ntiamoa-Baidu, the Board Chair of MiDA, expressed happiness that progress was being made with regard to the selection of a private sector partner for ECG.
“We encourage our bidders to take advantage of the opportunity provided by this conference to ask the relevant questions and gather the information you need to take the required actions in relation to the bidding process and to prepare your proposals,” Prof. Ntiamoa-Baidu said.
The next bidders’ conference would be held on July 19.
The deadline for the Consortium Formation would be on September 22, 2017, deadline for Submitting Comments is June 30, Final Request for Proposal Release date is August 18, and the Proposal Submission deadline is October 20, 2017.